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The Evil Ways of Mitt Romney, Vulture Capitalist
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Mitt Romney is under attack from all corners, The Left, and the Not Romneys for his leadership at Bain Capital. Rush Limbaugh was on the radio today almost lambasting Newt Gingrich for attacking "free enterprise." Many conservatives, and Romney himself, have noted that they are surprised that the Bain Capital exposé is originating from the right, and not from the left.
Two things to consider. First, in the vetting process, we need full disclosure. If we right wing folks aren't vetting Romney's record at Bain, looking around every tree and under every rock, I guarantee Obama's team is. In fact Obama's team is salivating to go after Romney, whose ability to run for president is a direct correlation of his earnings at Bain.
When I was in Iowa, a political consultant told me about how Romney is using millions to shape the nomination. One example is during the debates. This was particularly true at the Las Vegas debate. The sponsors of the debates sell tickets for the audience. These tickets are fairly expensive. Romney's campaign, or PAC, or whoever, bought a majority of the tickets and packed the house with hecklers for Romney. Do you remember the crowd's reaction, its fawning applause, to everything Romney said in Vegas? The audience was stacked against Perry and all of the others. The debate's results were shaped by inaccurate reporting on the part of the media as to what really transpired. News media outlets reported that Perry's attack against Romney about Romney's hiring of illegal immigrants to perform his yard work was ineffective, because no one clapped. They didn't clap because they were the guests and surrogates for Romney!
Romney is worth at least $250 million. At least that's how much was in his pocket when he left Bain Capital. In 2010, Romney's income was $9.3 million. He has enough cash to loan hundreds of millions to his campaign. Why not pack the debate audience by buying expensive tickets for his surrogates?
Romney's net worth was earned on the back of American entrepreneurs and workers. I was the victim of venture capitalists in 2004. I had a thriving business with multiple streams of revenue. One day a VC appeared on my doorstep, told me how great my company was, and offered to buy it through a fancy four stage financing scheme. I didn't think the plan was too bad at the time. It allowed me to leverage the business operation I had and expand into new markets. What's more, I would be working for the larger, more powerful entity. I fell for the trap.
After the deal was signed, my former business, which employed 15 great employees, and fed 15 families including my own, was loaded up with too much debt, and I was given a revenue growth plan that was unrealistic. As soon as I failed to meet those revenue targets, all hell broke lose. I was blamed for every failure that was coming. I bailed, leaving a $250,000 liability with my name attached to the horror. What was really happening was that the VC was attempting to use my company's cash flow to finance other acquisitions. In the process, the debt, and the pressure to meet unrealistic obligations to service that debt, broke my back. And I have a very sturdy back!
It is six years hence, and I have finally recovered from the ordeal. I went through a financial crisis, a marriage crisis and a career crisis. Luckily, and by the grace of God, I survived.
Every once and a while, a VC will get lucky and find a business and a business owner desperate enough to accept VC funding, and have that company thrive. Staples, in Romney's case, may be one of those. But in the meantime, there are probably hundreds of orphan companies that run well enough on their own, but cannot grow fast enough to meet VC expectations, or rise to VC-imposed debt obligations. A VC like Romney will gut them, fail the company, and everyone except Romney loses.
That's how Romney created $250 million in net worth for himself: By breaking the backs of otherwise hard-working, honest American workers and entrepreneurs. I hate people like that.
If you have a good business, stay away from vultures like Romney and grow your company, and provide for your employees. That's the American Dream!
The Chicago Tribune has a great explanation of the Romney modus operandi at Bain Capital:
Private equity firms operate through leveraged buyouts. They create limited partnerships to buy companies, usually pretty healthy ones since it’s the only way to attract financing, and then they burden the companies with debt while trying to make the balance sheets look good, often by cutting costs such as workers or their benefits, to flip the companies within five years for a profit.
Private equity firms put a relatively small amount down, say, 20 percent, and the companies they are buying borrow the rest from banks making them responsible for repayment. Suddenly, a company that had a reasonable debt load, if any, is subjected to crushing repayment obligations.
(Source: Chicago Tribune: "How Romney Grew Rich")
When my former company was foreclosed upon, it was no more than a shell and employed no one. The customers still needed the service, but the company under VC management after I left had treated its customers so poorly that there wasn't any goodwill remaining in the name.
I don't care what Rush Limbaugh says. As the Chicago Tribune notes, the actions of "spend little, borrow big, evade taxes and get control of a lucrative asset" is not entrepreneurship at all; it is theft.
VC theft is how folks like Romney get filthy rich, not by adding value, but by flipping businesses like they are condos. In the process Romeny's types are destroying the value of everyone else's American Dream.
Romney is using his hundreds of millions to "connect" with voters in a way that he could not connect with anyone at all without that horde of cash. The sad part is that much of that net worth was made on the backs of Americans pursuing the American Dream. They just didn't know the rules of the game changed. Nor did they know that Romney and his colleagues created the new rules.
And that, Mr. Limbaugh, is un-American. It's evil.
Read more about it at suntimes.com